Occidental Petroleum chairman Ray Irani lost his job Friday after 76% of shareholders opposed his reelection, the latest high-profile executive to be shown the doors.

He won’t be able to collect unemployment but, in this case, getting fired might be the best thing to happen to the longtime oil executive: Irani stands to receive an exit package of over $50 million if his departure is considered a “termination” vs. a merely $20 million package had he retired at the end of 2012, The WSJ reports.

The heft of Irani’s golden parachute adds a bit of absurdity to the excess of his tenure at Occidental: Always among America’s most highest-paid executives, Irani’s total compensation from 2004-2012 totaled over $1.1 billion.

Two years ago, shareholders voted to remove Irani as CEO, in part because of a backlash against his outsized compensation given Occidental shares were lagging major competitors. Scheduled to retire at the end of 2014, Irani sought to install a former executive as CEO, which prompted the latest shareholder revolt. Arguably, it’s also a sign of how the executive had come to believe the company belonged to him vs. other stakeholders, i.e. shareholders, customers, employees and the community at large.

As Henry Blodget and I discuss in the accompanying video, Irani is just one extreme example of the sickness infection corporate America: The Myth of the Irreplaceable Executive.

The myth holds that certain individuals must be paid extravagantly because they and only they have the talent and temperament to guide XYZ company. History has shown that’s almost never the case and the 2008 financial crisis pretty clearly showed these "masters of the universe" are all too human.

The dirty (yet open) secret is C-level executives often serve on the boards of other companies where they vote for outsized pay packages; in turn, compensation consultants then cite those packages as a rationale for paying other CEOs big bucks. To say that it’s very clubby and cliquey*is an understatement.

Even worse, these compensation packages are often tied to specific company performance metrics, giving individual executives huge personal incentives to focus on short-term goals vs. what’s in the company’s best long-term interests. This focus on the short-term – exacerbated by Wall Street’s fixation with quarterly results -- has contributed to the erosion of American industry’s long-term ability to compete in a global economy.

Furthermore, a combination of stagnant wages for median workers and rising CEO pay undermines our democracy and, if left unchecked, is the building blocks for a populist uprising, if not outright revolution. Sound far-fetched? Louis XVI and Marie-Antoinette didn’t see it coming either, much less more recent examples like Hosni Mubarak and other autocratic Arab leaders.

With income inequality continuing to rise, corporate wages hitting all-time lows as a percent of the economy and the ratio of CEO-to-worker pay hitting new heights, it’s a stretch to say the ‘Era of the Imperial Executive’ is ending.
But perhaps the pendulum is finally starting to swing against the C-Suite.

Good for him. You sound envious that it wasn't you able to pull that off.

Anyhow, anyone getting that does not make others poorer. You should be putting that on Bernanke and Obama. That is if you really cared about solving the problem instead of just being jealous.

Not a hard concept to grasp. Money paid to CEOs is money that could have been spent on new workers, new plants, R&D, marketing, training programs. All these things create jobs that create workers.

In many cases, these corporations are getting tremendously favorable tax breaks. Are they getting pumped into capital, workers, etc...? No. Executive compensation is skyrocketing while job growth is flat and the same workers are being asked to take on twice the workload.

Executive compensation is absolutely a problem. I have no problem with good CEOs getting paid handsomely. There is an enormous incentive problem when horrible CEOs are getting paid equally as handsomely.

Not a hard concept to grasp. Money paid to CEOs is money that could have been spent on new workers, new plants, R&D, marketing, training programs. All these things create jobs that create workers.

In many cases, these corporations are getting tremendously favorable tax breaks. Are they getting pumped into capital, workers, etc...? No. Executive compensation is skyrocketing while job growth is flat and the same workers are being asked to take on twice the workload.

Executive compensation is absolutely a problem. I have no problem with good CEOs getting paid handsomely. There is an enormous incentive problem when horrible CEOs are getting paid equally as handsomely.

It's NOT your property. Not a hard concept to grasp either. But for you it is. Therefore, END of discussion with you.

It's NOT your property. Not a hard concept to grasp either. But for you it is. Therefore, END of discussion with you.

I do not have a problem with small business owners doing whatever it takes to grow their business or making as much money as they see fit. I don't have a problem with private equity "raiders" who seize a market opportunity and make an insane amount of money off of it.

That's not what's happening here. When small businesses fail, the business owner loses money. When private equity or investors or anybody fails, they lose their shirt on it. When a CEO fails, they get paid and the shareholders are the ones who lose all their money and the company loses the ability to invest that money back into the business.

It is ridiculous to suggest that the corporation is the property of the CEO when they have NOTHING to lose if they fail, except for guarantee of employment.

I do not have a problem with small business owners doing whatever it takes to grow their business or making as much money as they see fit. I don't have a problem with private equity "raiders" who seize a market opportunity and make an insane amount of money off of it.

That's not what's happening here. When small businesses fail, the business owner loses money. When private equity or investors or anybody fails, they lose their shirt on it. When a CEO fails, they get paid and the shareholders are the ones who lose all their money and the company loses the ability to invest that money back into the business.

It is ridiculous to suggest that the corporation is the property of the CEO when they have NOTHING to lose if they fail, except for guarantee of employment.

Where did I say it was the CEO's property? You're making a strawman argument—a logical fallacy.
I only said the money or property was not yours, because you're the one whining about the pay he got. LOL

Really, it shouldn't matter if a business is small or big; privately owned or if shareholders own it through shares. The company leadership owes no fiduciary duty whatsoever to the public sphere. This is nonsense common good think from the collectivist trash heaps of history.

This is where I jump off the mostly libertarian train and realize that top executive salaries have climbed exponentially to insane levels over the past few decades and it isn't because they are so good at their jobs.

I think the government should stay out of business for the most part and let the free market do what it does, but I also realize that the robber barons of the industrial revolution got disgustingly rich off the backs of what amounts to slave labor. And I see us heading in that direction again. Of course they already went pretty far down the path of getting rich off of slave labor when they moved all the jobs to China.

The banks and the government should definitely get plenty of blame, for sure. And again, I don't really think the government is capable of "fixing" this problem. But I really don't know what can be done about it.

Apparently a lot of people believed Gordon Gecko when he said that greed was good.

This is where I jump off the mostly libertarian train and realize that top executive salaries have climbed exponentially to insane levels over the past few decades and it isn't because they are so good at their jobs.

I think the government should stay out of business for the most part and let the free market do what it does, but I also realize that the robber barons of the industrial revolution got disgustingly rich off the backs of what amounts to slave labor. And I see us heading in that direction again. Of course they already went pretty far down the path of getting rich off of slave labor when they moved all the jobs to China.

The banks and the government should definitely get plenty of blame, for sure. And again, I don't really think the government is capable of "fixing" this problem. But I really don't know what can be done about it.

Apparently a lot of people believed Gordon Gecko when he said that greed was good.

Yup.

__________________
"Not every one that saith unto me, Lord, Lord, shall enter into the kingdom of heaven; but he that doeth the will of my Father ... And then will I profess unto them, I never knew you: depart from me, ye that work iniquity."

"If the people let government decide what foods they eat and what medicines they take, their bodies will soon be in as sorry a state as are the souls of those who live under tyranny." - Thomas Jefferson

This is where I jump off the mostly libertarian train and realize that top executive salaries have climbed exponentially to insane levels over the past few decades and it isn't because they are so good at their jobs.

I think the government should stay out of business for the most part and let the free market do what it does, but I also realize that the robber barons of the industrial revolution got disgustingly rich off the backs of what amounts to slave labor. And I see us heading in that direction again. Of course they already went pretty far down the path of getting rich off of slave labor when they moved all the jobs to China.

The banks and the government should definitely get plenty of blame, for sure. And again, I don't really think the government is capable of "fixing" this problem. But I really don't know what can be done about it.

Apparently a lot of people believed Gordon Gecko when he said that greed was good.

Reminds me of when I was in middle school and they had that day were they asked everyone what profession they'd like. After the usual "brew master!" and such, they got to me. I replied, "Robber baron." Had a few sideways looks that day, more than usual.

__________________I think the young people enjoy it when I "get down," verbally, don't you?

Reminds me of when I was in middle school and they had that day were they asked everyone what profession they'd like. After the usual "brew master!" and such, they got to me. I replied, "Robber baron." Had a few sideways looks that day, more than usual.

__________________
"Not every one that saith unto me, Lord, Lord, shall enter into the kingdom of heaven; but he that doeth the will of my Father ... And then will I profess unto them, I never knew you: depart from me, ye that work iniquity."

"If the people let government decide what foods they eat and what medicines they take, their bodies will soon be in as sorry a state as are the souls of those who live under tyranny." - Thomas Jefferson

This is where I jump off the mostly libertarian train and realize that top executive salaries have climbed exponentially to insane levels over the past few decades and it isn't because they are so good at their jobs.

I think the government should stay out of business for the most part and let the free market do what it does, but I also realize that the robber barons of the industrial revolution got disgustingly rich off the backs of what amounts to slave labor. And I see us heading in that direction again. Of course they already went pretty far down the path of getting rich off of slave labor when they moved all the jobs to China.

The banks and the government should definitely get plenty of blame, for sure. And again, I don't really think the government is capable of "fixing" this problem. But I really don't know what can be done about it.

Apparently a lot of people believed Gordon Gecko when he said that greed was good.

Only thing is, the there weren't any Robber Barons back in the day. That's another myth. If there were any, they were getting subsidies from the govt or preferential treatment. Then markets were blamed.

The key is to look where there really isn't a free market while one is being promoted.